Opinions and Experiences with Hedging and Martingale

roulette and trading are very different things, in roulette the odds are in favor of the house and in trading you try keeping the odds in your favor, I like who named this "roulette trading" sheer childish

Try to trade by tossing a coin and you will quickly find out how the 50/50 probability will change. Then you can also set off income tax.

You think if u flip a coin 10 times you'll get head 5 times and 5 times tails? poor you.

Lazy Hedging can be deveoped but hedging is an art which gives you enjoyment but no utility to others who dont have painting skills.

in hedging you close the one in profit and hope your negative trade goes into the black.
your hedged profit trade with offset the margin and losing trade back to break even or better.

These are wise words, thank you very much!

I didn't understand what that has to do with painting ... (indicators?)

I have already developed the idea a little further, is interesting.
So far only one member has understood the LH idea and made comments, and because almost nobody is interested, I won't post new developments now, maybe later.

If you want to really take the project forward, I can give you feedback.
I have done hedging for years and have made reasonable profits.
For one trade involving NZD it took me 2 years to recover from drawdown after paying 60% of profit as swap costs. Still made a nett profit. No regrets because it taught me how to remain patient.
For several trades involving GBPJPY it took me 9 months to recover from drawdown after paying 28% as swap costs. Still kept 72% as nett profit.
The loss was related to loss of opportunity by freezing margin capital. After hedging I opened another account to continue my regular trading.

But bigger gain was the big increase in the level of confidence gained.
Another useful lesson was never to touch commodities currencies for hedging.
Revealing lesson was how the market makers carry out big adjustments to balance their books and book profits.
It brought into focus the role of consecutive daily candles for EurUsd and other symbols.

The major jolt came from the sudden yearly readjustments done by the market makers.
They have the orderbooks and they have the power to move the markets at will and legitimately. No conspiracy.
Exchanges have given this job to them to keep the market liquid.
This realisation changed my life and forced me to study antics of the bidding in the auction markets.
Since then I have discarded complete use of any analysis done before entering the market for day trading.
For ever goodbye to positional trading. Swing trading for the day is what I do daily. I leave no position open for overnight.

EurUsd is the best symbol for hedging because the direction reverses after maximum 15 consecutive days in same direction.

I don't know Excel or how to read mql. But 36 years of experience has helped me make an adventureful and a patient screen observer.

1. Can you please make an indicator that can backtest the size of spike, profit/loss, etc from Start Time: YYYYDDMM HH: MM: SS (auto producing week days) to Close Time.
And also collect statistics just as myfxbook is generating for forward tests preferably in a csv spreadsheet to be stored in mql files.



2. Similarly please code another indicator for the size of pullback and their frequency of divergence away from the Trend.
Counting the misses measured in pip distances and bars based on hypothetical threshold limits and hypothetical trend point defined by the user is a step towards realistic accuracy rather than always basing on Moving averages and technical oscillators.
It is to the credit of FF coder jeanlouie for having introduced some variation to the standard formula of coding indicator. He has coded a BB stop counter by ramping up the speed. A good job. This indicator is of not much use to me except of the knowledge it gave me of ramping up the speed .

3. I don't have faith in BB and Standard Deviation to really spot the spikes and pullbacks with any level of accuracy.
For me, High low of the defined previous Bar - it could be of any TF of the user's liking - which can reflect the price action trend.
Spikes and pullbacks define the trend continuation or prevalence of flat market or counter trend. Moving Averages can't match the speed of algo traders of the market makers.
High Low can but up to an extent and better than Moving Averages or Super Trend.

The indicator should be able to collect statistics on the size of divergences measured by pip distances from the trend for spikes and pullbacks and show the frequency to establish some pattern. Generation of spread sheet is important.



4. Instead of using High Low as the axis point to measure spikes and pullbacks, volume divergence can be very useful . FF member RickM can give an idea on how to do it.

@simnz, please believe me that I don't have time for new projects, not even for my exclusive LH!

Thanks for sharing your strategy, could you also tell us on what time frame it's good to trade with this system.

Any entry method would be successful if the analysis is correct.

Maybe yes, maybe not, but

Any entry method would be successful if the exit is correct!

For most practical purposes I would still say analysis method is a stronger condition than exit method. Exit method alone isn't enough to survive. What if the analysis is incorrect and the trades are almost always buying at swing tops, selling at swing bottoms.

The more throws, the more certainty is 50:50.

It works when there is a system with positive statistics that exist already. If both the two techniques are employed properly then the idea can work, if not then your chasing your tail especially with a low balance. One needs large capital to go this route.
Stoploss- limits losses.
Martingale- aims to recover losses.
Hedging- aims to prevent losses.

Applying the above to the market the right way makes all the difference. People will continue to make money and sadly some will always lose it.

Big capital, small leverage = ridiculous return.

This is the best that can happen!

This is what hedging is for. I have posted a profitable variant in my Lazy Hedging thread, but only one member (@gerval) understood the idea correctly.
One certainly have to test it, and I'll invest time in it later.

hahaha that's true, good point.

An indicator that seems to have a probability greater than 50% and a martingale system (with lower risk) used with the really nifty trailing stop. Swingman is a teacher. Are you still using the system?

You're right!
Unfortunately, I didn't have the time to program an EA, and it is difficult manually to calculate and trade the sliding limits.

Hello sir please kindly help me with the normal MACD indicator with this setting 10....20.....1, ....and arrow alert input in the subwindow,so that when there's a crossover above or below 0, the arrow should be displayed where the crossover occurred the arrow should be in the subwindow .Thanks